Once you've viewed your credit history report, and you know
your credit score, you're more aware of the specific
problems you might have trying to get a bad credit loan.
If your credit score is quite low, you may still be able to
get a loan, but you'll end up paying much higher interest
rates for the privilege. Often, the amount of money you can
borrow will be significantly lower than if your credit were
good. You probably will not be able to borrow tens of
thousands of dollars; more likely, only several thousand
dollars, depending on a number of factors including your
credit score and income level.
You can sometimes increase your chances of getting a loan
with bad credit if you're willing to do a little bit of
work. When you got a copy of your credit report, you were
able to see all of the problems listed on the report that
negatively affect your credit score. Chances are that you
can have some of those items removed or changed, thereby
increasing your FICO score.
Legally, if you dispute an item listed on your credit
report, the lender must verify the entry within thirty
days, or they are required to remove that item from your
credit report. Likewise, if you have items on your credit
report which are several years old, you may be able get
them automatically removed. Say you have a listing on your
credit report which is four years old. It's a revolving
store charge account, but that store is no longer in
business. If you file a dispute, and no one is around to
look up the old records, the lender who owns the debt may
be unable to respond to your dispute, so it will
automatically be removed. The more negative items you can
get removed, the higher your credit score will climb.
Beware, this strategy can also backfire on you. If you
dispute something and the company has people available to
verify the credit report item, your credit report could be
updated with the current date. And sometimes when this
happens, it shows as a new credit problem on your credit
report. Choose your battles wisely!
Once you've verified that your credit report is accurate,
and your credit score is as high as you can get it, then
it's time to start looking for banks or finance companies
that provide loans for people with bad credit. Keep in
mind that you can't always get the full amount that you
want. Sometimes you must begin with a smaller loan,
perhaps $500. When you demonstrate financial
responsibility to the lender, your amount of available
credit will increase.
Most lenders who specialize in bad credit loans will allow
you to explain your credit history problems. If some of
your credit problems are due to circumstances beyond your
control- for instance, an emergency medical bill, but all
other accounts and bills are paid on time, this information
will be considered when reviewing your loan application.
Almost universally, finance companies who provide loans for
people with bad credit will charge higher interest rates
than traditional lenders. Be prepared to answer some
questions about your credit history, and be prepared to pay
more in interest and/or loan processing fees. Most people
with damaged credit will be able to get a loan, but many of
them shouldn't. Make sure you have a legitimate reason for
applying for the loan, and take advantage of the
opportunity to improve your credit in the process.
----------------------------------------------------
Gregg Pennington writes articles on a number of topics
including loans, debt and credit. For more information
about finding a loan with bad credit visit:
http://www.onlinemoneysources.net/bad-credit-personal-loans.
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